Tesla Executive Summery

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Tesla Executive Summery

Category: Capstone Project

Subcategory: Management

Level: Masters

Pages: 8

Words: 2200

Tesla Executive Summary
Student’s Name
Institutional Affiliation
Tesla Executive Summary
YOUR assessment of Tesla’s current position
The brief identification and discussion of the historical strategic events that have led to the current situation
Tesla is an all-electronic car manufacturing firm located in the Silicon Valley, California in the United States of America. The company designs and manufactures electric cars. It also deals in the manufacture of Powertrain electric car components. The company was founded in 2003 by three engineers, Marc Tarpenning, Martin Eberhard, as well as Ian Wright. The Tesla name traces its origins to the famous Nikola Tesla.Due to a financial crisis at the company, the founders sought financial help. The help came in the form of Elon Musk, the present CEO of the Tesla Motors company. When he joined the firm, Musk came on as the chairman of the board. In 2009, he took over as the CEO after another financial crisis almost sent the firm into bankruptcy.The pioneer electric car from Tesla Motors was the ‘Roadster‘ sports car (Becker, Sidhu&Tenderich, 2009). An all-electric car that ran on a Powertrain battery.The roadster sold over 2500 units and its production stopped in 2011 when a contract with Lotus Elise company ended. The second model, Model S was released in 2012, though a press release announcing its production took place in 2008. After the release of the Model S in 2012, the Model sold over 2650 units in 2012 alone and has gone on to win several automobile awards.
The brief identification and discussion of the key system variables impacting their current situation
The swinging oil prices mean that car users have to deal with the rising fuel costs every time the oil prices shoot up.
Elon Musk and his vision to make Tesla Motors the best electric car company in the world. His sound management decisions have been instrumental in the success of the company so far.
Electric cars are Eco-friendly, making them models for conservation lobbyists. With global warming an issue, the world is in search of eco-friendly solutions. Tesla provides such a solution.
Oil is a non-renewable resource and its resources are expected to reduce after the year 2020. The demand for electric cars are expected to shoot up further by that period.
Free recharge stations offered by Tesla across the United States. The company also plans on constructing more recharge stations to help increase demand for its cars globally.
Identify who/ what these elements are and why they are important
The Tesla Motors company is boosted by a variety of variables making it a top selling electric vehicle in the United States and some countries in Europe such as Norway. The main idea behind their success is the unwavering vision and focus to succeed by their CEO Elon Musk. Since joining the company, the company has achieved a lot of success and is poised to grow further. His vision of producing the best electric cars in the market has endeared many customers and investors alike. He is probably the sole reason the company has generated so much interest and attracted investors far and wide.
Secondly, the fact that Tesla Motors deals exclusively in electric cars. Electric cars are considered environment-friendly vehicles and auger well with the global spirit to move into production and the consumption of Eco-friendly products that utilize renewable energy (Rajashekara, 2013). The company can boast of its Eco-friendly nature and vision to reduce gas emissions into the environment and to protect the world for future generations. Non-Electric car companies cannot boast of such an accomplishment.
Thirdly, the ever-swinging oil prices. Presently, oil prices have dipped. However, everyone knows that it will not be long before the oil prices shoot up again. This has been the trend for decades. With increasing gas prices, car users have to delve deeper into their pockets. Getting an electric car means that the swinging prices do not have to affect your car usage bill. Additionally, the oil resource is expected to lower after the year 2020, at least that is what Tesla Motors believes. With the reduction of oil, the prices will be expected to shoot up and electric cars will be the most in-demand product at the time.
Repair costs are at a minimum with the new model, the Model S. Reviews have it that the model is so engineering-sound that only six parts need regular checking and replacements. That is, the four wheels and the wipers. The other car parts are durable and present car owners attest to the fact. Additionally, Tesla has promised free recharging of their electric cars across the United States. Tesla also plans on increasing construction of electric car recharging stations across the United States and in other markets where they sell their cars.
Discuss the potential for these elements to change over time and the projected impact of these elements when/if they do change
Elon Musk, the CEO of Tesla Motors is not expected to leave the management of the company in the near future. Presently, he manages three companies and Tesla is one of them. However, the growth of Tesla is poised to grow astronomically in the near future. Therefore, management of Tesla is poised to stay strong, if past management decisions are anything to go by.
Dwindling oil prices are a major concern for car users. Electric cars offer a better alternative to these consumers. Tesla Motors expects Oil prices to shoot up significantly as the global oil resources dry up. The electric cars present a ready alternative to car users presently and for the future.
Global warming and international conventions are calling for countries throughout the world to reduce gas emissions and produce products that utilize renewable sources of energy. The damage already done to the Ozone layer is significant. The changes are unlikely to be reversed and, therefore, conservation efforts are not likely to slow down. These facts put Tesla Motors in an enviable position in which demand for its products is only likely to grow.
The Minimum repair services are not likely to change in the near future. With the company planning construction of more recharge stations across the country, the demand for the company’s cars is only likely to grow.
Your answers to the Questions:
Who Tesla IS now?
Tesla is a large electric car manufacturer in the United States. It is the leading producer of electric cars in the United States. Tesla’s latest model, the Model S has won numerous automobile awards and puts the company in a position where its growth is guaranteed. Tesla also has its share prices on the Wallstreetstock exchange and has since grown over 300 times since their initial public offer.Tesla also manufactures Powertrain components and durable batteries for use in its cars and for sale to other car companies such Daimler.
On Friday, Tesla is expected to announce and launch the new battery that is expected to be able to power entire homes. In fact, it is estimated that the new battery is expected to slash the electricity bill by over 25 percent. The launch of the battery is expected to cause panic across the traditional power providers.
Who they are NOT?
Tesla Motors manufactures cars that depend entirely on electricity. The total dependence on electricity is both advantageous and disadvantageous. Electric charging stations are not readily available in many parts of the world, even in the United States. This challenge has curtailed the growth of the company. However, Tesla plans to construct more charging stations across the United States.
Tesla Motors car models are expensive and are not affordable to middle and low income earners in the United States. Critics have argued that the electric car can only grow if it partners with the government in the production and sale of its cars. Otherwise, the production cost will remain high and the company’s products are poised to remain as luxury products only available to the financially mighty people.
Tesla faces stiff competition in the European market for electric cars thatare hybrid in nature, meaning that the cars can use both electricity and gas. These cars are considered ideal at the moment as electric stations are not readily available throughout the world. The all-electric car still faces its challenges. In the tropical areas, rain may cause short-circuiting of the car’s engine, meaning that its market is limited by such challenges.
Where they should be going- and why?
Tesla is headed in the right direction. Investing in technology that is expected to make production of their Powertrain batteries cheaper.California has passed legislation that has made it economically feasible to invest in the production of storage devices for businesses for backup purposes. Tesla is located in California and their battery production business is poised to grow in the near future. The market for production of batteries for backup reasons is a relatively new market in the state making the business a viable option.
Solar and wind generation power is an energy option that is growing in demand in the United States. Recent reports indicate that battery power can be used for grid-regulating tasks.Elon Musk is also the CEO of Solar City, the leading solar services provider in California for the residential market. Leading two companies with similar goals can be advantageous as the companies seek to establish themselves as the market leaders in the provision of alternative energy sources for both residential homes as well as businesses.
Where should they not be going- and Why?
Acquiring new factories and plants to enhance production is an ambitious plan that may prove too too much for the company. It introduces new challenges to the Tesla companythat the company has not faced before, operating on a large scale.
Tesla also plans on changing the battery technology and that presents its own risks.
Based on your answers to the questions above:
Propose any changes necessary to the Tesla vision and mission for the company
The company’s mission is to accelerate the world’s transition to sustainable transport does not need any changes. The mission should remain the same,however, the vision needs to be altered. The company seems to achieve the long term needs before meeting the short term needs. The people who can afford the models being produced presently are the wealthy in society. The mere fact that an exclusive few people can afford the car beats the logic of sustainability. The people able to afford the car presently may not have trouble filling gas in their car’s tanks. The biggerpopulation who lie in the middle class are unable to afford the car.
The company also plans to unveil a battery that will be capable of powering entire homes. The cost of the batteries will also present the main challenge to the consumers who may be in need of cost reduction (Werber, Fischer & Schwartz, 2009). Again, the very wealthy will be able to afford. The company has taken steps to shift to a new technology that is expected to lower the cost of production of these batteries. It may be the right step in the right direction but only time will tell.If the durability of the batteries after production remains at the higher end,the company will definitely establish itself as the leader in the provision of alternative energy.The target audience should be the middle class if the company aims to grow exponentially.
Identify 3-5 very high level strategic activities Tesla should consider to achieve the newly stated vision and mission
Start the production of other models. Different models for different marketsis the way to increase sales. Having the same model for different markets is not the best strategy to increase sales. The company needs to consider planning the production of a variety of models targeting different markets. Some consumers already feel left out because the price range of the existing model is too high.
Exploit the other markets such as Africa with many emerging markets. The African continent experiences the Sun more than any other continent. The potential for solar energy is enormous andexploiting such markets presents unexplored potential markets for the company (Armand &Tarascon,2008). The power blackouts in the continent are also a major issue that can be addressed by the backup batteries.
The company should consider the production of hybrid cars to help the integration of the all-gas market to the all-electric market. Shifting from gas to all-electric cars present a major hurdle for the consumers (Orbach&Fruchter, 2011). However, existence of hybrid cars can help consumers with shifting to electric cars as they get used to the use of electric cars. The solution will also allow for Tesla to construct more electric charge stations. Tesla is definitely a market leader in United States and probably in the North American region. However, a global shift in strategic management is necessary for the company to take the global market by storm.
References
Armand, M., &Tarascon, J. M. (2008).Building better batteries. Nature,451(7179), 652-657.
Becker, T. A., Sidhu, I., &Tenderich, B. (2009). Electric vehicles in the United States: A new model with forecasts to 2030. Center for Entrepreneurship & Technology (CET) Technical Brief, (2009.1).
Hidrue, M. K., Parsons, G. R., Kempton, W., & Gardner, M. P. (2011).Willingness to pay for electric vehicles and their attributes. Resource and Energy Economics, 33(3), 686-705.
Orbach, Y., &Fruchter, G. E. (2011). Forecasting sales and product evolution: The case of the hybrid/electric car. Technological Forecasting and Social Change, 78(7), 1210-1226.
Rajashekara, K. (2013). Present status and future trends in electric vehicle propulsion technologies. Emerging and Selected Topics in Power Electronics, IEEE Journal of, 1(1), 3-10.
Wirasingha, S. G., Schofield, N., &Emadi, A. (2008, September). Plug-in hybrid electric vehicle developments in the US: trends, barriers, and economic feasibility. In Vehicle Power and Propulsion Conference, 2008.VPPC’08.IEEE(pp. 1-8). IEEE.
Werber, M., Fischer, M., & Schwartz, P. V. (2009). Batteries: Lower cost than gasoline?. Energy Policy, 37(7), 2465-2468.
Yu, A. S. O., Silva, L. L. C., Chu, C. L., Nascimento, P. T. S., & Camargo, A. S. (2011, July). Electric vehicles: struggles in creating a market. In Technology Management in the Energy Smart World (PICMET), 2011 Proceedings of PICMET’11: (pp. 1-13). IEEE.